News round-up: ‘Governance failure’ at Derby, MPs’ business rates warning, tri-borough procurement deal, capital expenditure rising

MPs warn government on business rates
The government should specify how it will protect local government from the vast number of business rates appeals as the country moves to 100% devolution for the levy. The call came from MPs on the House of Commons communities and local government committee who said appeals are “dwarfing increases in business rates revenues”. Committee chairman Clive Betts said: “The issue of appeals is of significant concern to local authorities and it is essential that it is resolved before the government pushes ahead with business rates changes. Similarly, the government must address the alarm of councils, which are understandably worried that their spending needs and the funding of their local services will not be supported by their business rates revenue.”

Meanwhile London Councils called on the government to act. Jules Pipe, chairman of the body, said:  “In London, some authorities have as much as 40% of this income trapped in a lengthy appeals process and – if this continues into the new system – there is significant risk that important services relying on this funding would not be delivered.”

Auditor reveals ‘governance failures’ at Derby council
Grant Thornton, auditors of Derby council, have issued a public interest report highlighting governance failures at the authority. The report was triggered by concerns about the council’s Job Evaluation project, valued at £5m but costing an additional £1.2m due to mismanagement, according to the Grant Thornton report. Job Evaluation involved the “sizing” of jobs at the council. The auditor’s report said: “The implementation of Job Evaluation … at Derby City Council has been characterised by failures of governance.” A statement from Derby council said: “Many of the matters reported occurred some time ago and the council has already taken a large number of improvement actions through a Governance Action Plan. Numerous changes have already been put in place, and a number are on-going in order to strengthen and enhance our governance framework. This framework is subject to a number of checks and balances to ensure continuous improvement.”

£200m tri-borough procurement deal
Three London boroughs -Kensington & Chelsea, Hammersmith & Fulham and Westminster – have agreed a £200m deal for BT to supply IT services including networking, cloud services, mobile telephony and tele conferencing. The deal creates a framework which all 33 London boroughs will be able to join. The framework should reduce the burden of procurement for councils.

Capital spending rise
New figures show capital expenditure among local authorities in England is up 2.8% year-on-year in 2015-16, to £22.2bn. Capital receipts however have risen 17.4% to £3.5bn. DCLG forecasts capital expenditure to increase in 2016-17 by 6.6% t0 £23.5bn. The largest portion of capital expenditure was financed by government grants at £9.5bn while £4.7bn came from borrowing. £924m came from HRA accounts compared to £686m in the previous year.